A federal jury in Denver found four participants guilty of securities fraud and other charges in connection with a “high-yield investment scheme” in which hundreds of investors lost $56 million. Norman Schmidt, of Denver was found guilty of conspiracy to commit securities fraud, mail fraud, and wire fraud in addition…
The California Supreme Court and a U.S. Court of Appeals have both determined that securities arbitration standards do not violate the California Constitution. The courts have instead decided that The Federal Arbitration Act preempts (is superior to) California’s ability to govern securities arbitration. Rapidly growing arbitration is forcing consumers to,…
John H. Whittier, a former hedge fund manager and the founder of Wood River Partners LP and its offshore company in the Cayman Island, has pled guilty to carrying out a securities fraud scheme that cost investors $88 million. Whittier had been charged with four counts of securities fraud for…
A large percentage of U.S. investors could be convinced to invest into a “guaranteed return” investment scam, according to a poll by “Money-Track,” a public-television series, and Investor Protection Trust, an investor education group. The poll surveyed investors regarding eight basic investment principles, such as the definition of diversification and…
In two related decisions the a New York U.S. Bankruptcy Court determined that a failed broker-dealer must arbitrate (under the NASD Code of Arbitration) its differences with a former registered representative and the firm that hired him — even though the defunct firm is no longer is an NASD member…
Three former brokers of Citigroup, Merrill Lynch and Lehman Brothers face a second trial on charges they conspired to commit fraud by allowing day traders to eavesdrop on orders being discussed on investment firms’ internal “squawk boxes.” Four current and former executives at the day trading firm A. B. Watley…
William S. Lerach, a prominent plaintiffs’ attorney, met with SEC staff members last week to try to convince the agency to support investor lawsuits filed against banks accused of helping corporate executives engage in fraud. Recently, the U.S. Supreme Court agreed to hear a case that will look at the…
NYSE Regulation Inc. and the Securities and Exchange Commission say that a clearing affiliate and prime broker of Goldman Sachs Group will pay $2 million in fines and penalties over its alleged role in an illegal short-sale trading scheme that was executed by Goldman Sachs customers through their accounts with…
Clark Mitchell, a South Florida physician, has pleaded guilty to two criminal counts related to a $1 billion viatical sales scheme connected to death benefits company Mutual Benefits Corp. The company has been shut down by state and federal authorities. In a plea agreement announced at the U.S. District Court…
In California, four stockbrokers who were convicted for securities fraud and conspiracy because of their roles in a “pump-and-dump” scheme that cost investors over $5 million will be sentenced this year. According to the U.S. Attorney’s Office, the four men worked for Hampton Porter Investment Bankers LLC, a San Diego-based…